EU softens proposal on extension of Chinese solar duties

BRUSSELS (Reuters) - The European Commission has proposed extending import duties on solar panels from China by 18 months, a shorter period than initially planned, and with a gradual phase-out, Commission Vice President Frans Timmermans said on Wednesday.

Anti-dumping and anti-subsidy duties have been in place on Chinese solar panels and cells since 2013 and are currently under review as to whether they should be maintained. A majority of EU countries last month opposed a proposed two-year extension.

Timmermans told a news conference that it was a sensitive issue. The Commission's proposal, revealed by Reuters on Tuesday, will be put to the EU's 28 member states later this month.

"The phase-out is also meant to make sure that producers of solar panels in the European Union have the time to adapt to the new situation. The precise conditions are something that will be up for debate, also with member states now," Timmermans told a news conference.

The Commission faces a delicate balancing act between the interests of EU manufacturers and those benefiting from cheap imports, while also being concerned about the response from Beijing, seen as a possible ally in fights against protectionism and climate change.

The EU and China came close to a trade war in 2013 over EU allegations of dumping by Chinese solar panel exporters.

To avoid that, both sides agreed to allow limited tariff-free imports of panels at a minimum price of 0.56 euros per watt, anti-dumping duties of up to 64.9 percent for those outside the agreement and anti-subsidy duties capped at 11.5 percent.

EU ProSun, a group of manufacturers including Germany's SolarWorld, said the measures had allowed EU producers to invest and had not impeded the market's development. What happened after the 18 months were up was key.

Luc Triangle, general secretary of trade union federation industriAll Europe, said limiting the extension set a dangerous precedent for other industries. The EU has been particularly active in the past year on cases concerning Chinese steel.

SolarPower Europe, which represents those in the solar industry opposed to duties, said reducing the extension period was positive although cells should be excluded altogether and that it was vital to determine what the gradual phase-out means.